SB1608 EngrossedLRB099 10335 HLH 30562 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Uniform Penalty and Interest Act is amended
5by changing Section 3-3 as follows:
 
6    (35 ILCS 735/3-3)  (from Ch. 120, par. 2603-3)
7    Sec. 3-3. Penalty for failure to file or pay.
8    (a) This subsection (a) is applicable before January 1,
91996. A penalty of 5% of the tax required to be shown due on a
10return shall be imposed for failure to file the tax return on
11or before the due date prescribed for filing determined with
12regard for any extension of time for filing (penalty for late
13filing or nonfiling). If any unprocessable return is corrected
14and filed within 21 days after notice by the Department, the
15late filing or nonfiling penalty shall not apply. If a penalty
16for late filing or nonfiling is imposed in addition to a
17penalty for late payment, the total penalty due shall be the
18sum of the late filing penalty and the applicable late payment
19penalty. Beginning on the effective date of this amendatory Act
20of 1995, in the case of any type of tax return required to be
21filed more frequently than annually, when the failure to file
22the tax return on or before the date prescribed for filing
23(including any extensions) is shown to be nonfraudulent and has

 

 

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1not occurred in the 2 years immediately preceding the failure
2to file on the prescribed due date, the penalty imposed by
3Section 3-3(a) shall be abated.
4    (a-5) This subsection (a-5) is applicable to returns due on
5and after January 1, 1996 and on or before December 31, 2000. A
6penalty equal to 2% of the tax required to be shown due on a
7return, up to a maximum amount of $250, determined without
8regard to any part of the tax that is paid on time or by any
9credit that was properly allowable on the date the return was
10required to be filed, shall be imposed for failure to file the
11tax return on or before the due date prescribed for filing
12determined with regard for any extension of time for filing.
13However, if any return is not filed within 30 days after notice
14of nonfiling mailed by the Department to the last known address
15of the taxpayer contained in Department records, an additional
16penalty amount shall be imposed equal to the greater of $250 or
172% of the tax shown on the return. However, the additional
18penalty amount may not exceed $5,000 and is determined without
19regard to any part of the tax that is paid on time or by any
20credit that was properly allowable on the date the return was
21required to be filed (penalty for late filing or nonfiling). If
22any unprocessable return is corrected and filed within 30 days
23after notice by the Department, the late filing or nonfiling
24penalty shall not apply. If a penalty for late filing or
25nonfiling is imposed in addition to a penalty for late payment,
26the total penalty due shall be the sum of the late filing

 

 

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1penalty and the applicable late payment penalty. In the case of
2any type of tax return required to be filed more frequently
3than annually, when the failure to file the tax return on or
4before the date prescribed for filing (including any
5extensions) is shown to be nonfraudulent and has not occurred
6in the 2 years immediately preceding the failure to file on the
7prescribed due date, the penalty imposed by Section 3-3(a-5)
8shall be abated.
9    (a-10) This subsection (a-10) is applicable to returns due
10on and after January 1, 2001. A penalty equal to 2% of the tax
11required to be shown due on a return, up to a maximum amount of
12$250, reduced by any tax that is paid on time or by any credit
13that was properly allowable on the date the return was required
14to be filed, shall be imposed for failure to file the tax
15return on or before the due date prescribed for filing
16determined with regard for any extension of time for filing.
17However, if any return is not filed within 30 days after notice
18of nonfiling mailed by the Department to the last known address
19of the taxpayer contained in Department records, an additional
20penalty amount shall be imposed equal to the greater of $250 or
212% of the tax shown on the return. However, the additional
22penalty amount may not exceed $5,000 and is determined without
23regard to any part of the tax that is paid on time or by any
24credit that was properly allowable on the date the return was
25required to be filed (penalty for late filing or nonfiling). If
26any unprocessable return is corrected and filed within 30 days

 

 

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1after notice by the Department, the late filing or nonfiling
2penalty shall not apply. If a penalty for late filing or
3nonfiling is imposed in addition to a penalty for late payment,
4the total penalty due shall be the sum of the late filing
5penalty and the applicable late payment penalty. In the case of
6any type of tax return required to be filed more frequently
7than annually, when the failure to file the tax return on or
8before the date prescribed for filing (including any
9extensions) is shown to be nonfraudulent and has not occurred
10in the 2 years immediately preceding the failure to file on the
11prescribed due date, the penalty imposed by this subsection
12(a-10) Section 3-3(a-10) shall be abated. This subsection
13(a-10) does not apply to transaction reporting returns required
14by Section 3 of the Retailers' Occupation Tax Act and Section 9
15of the Use Tax Act that would not, when properly prepared and
16filed, result in the imposition of a tax; however, those
17returns are subject to the penalty set forth in subsection
18(a-15).
19    (a-15) A In addition to any other penalties imposed by law
20for the failure to file a return, a penalty of $100 shall be
21imposed for failure to file a transaction reporting return
22required by Section 3 of the Retailers' Occupation Tax Act and
23Section 9 of the Use Tax Act on or before the date a return is
24required to be filed; provided, however, that this . This
25penalty shall be imposed only if regardless of whether the
26return when properly prepared and filed would not result in the

 

 

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1imposition of a tax. If such a transaction reporting return
2would result in the imposition of a tax when properly prepared
3and filed, then that return is subject to the provisions of
4subsection (a-10).
5    (b) This subsection is applicable before January 1, 1998. A
6penalty of 15% of the tax shown on the return or the tax
7required to be shown due on the return shall be imposed for
8failure to pay:
9        (1) the tax shown due on the return on or before the
10    due date prescribed for payment of that tax, an amount of
11    underpayment of estimated tax, or an amount that is
12    reported in an amended return other than an amended return
13    timely filed as required by subsection (b) of Section 506
14    of the Illinois Income Tax Act (penalty for late payment or
15    nonpayment of admitted liability); or
16        (2) the full amount of any tax required to be shown due
17    on a return and which is not shown (penalty for late
18    payment or nonpayment of additional liability), within 30
19    days after a notice of arithmetic error, notice and demand,
20    or a final assessment is issued by the Department. In the
21    case of a final assessment arising following a protest and
22    hearing, the 30-day period shall not begin until all
23    proceedings in court for review of the final assessment
24    have terminated or the period for obtaining a review has
25    expired without proceedings for a review having been
26    instituted. In the case of a notice of tax liability that

 

 

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1    becomes a final assessment without a protest and hearing,
2    the penalty provided in this paragraph (2) shall be imposed
3    at the expiration of the period provided for the filing of
4    a protest.
5    (b-5) This subsection is applicable to returns due on and
6after January 1, 1998 and on or before December 31, 2000. A
7penalty of 20% of the tax shown on the return or the tax
8required to be shown due on the return shall be imposed for
9failure to pay:
10        (1) the tax shown due on the return on or before the
11    due date prescribed for payment of that tax, an amount of
12    underpayment of estimated tax, or an amount that is
13    reported in an amended return other than an amended return
14    timely filed as required by subsection (b) of Section 506
15    of the Illinois Income Tax Act (penalty for late payment or
16    nonpayment of admitted liability); or
17        (2) the full amount of any tax required to be shown due
18    on a return and which is not shown (penalty for late
19    payment or nonpayment of additional liability), within 30
20    days after a notice of arithmetic error, notice and demand,
21    or a final assessment is issued by the Department. In the
22    case of a final assessment arising following a protest and
23    hearing, the 30-day period shall not begin until all
24    proceedings in court for review of the final assessment
25    have terminated or the period for obtaining a review has
26    expired without proceedings for a review having been

 

 

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1    instituted. In the case of a notice of tax liability that
2    becomes a final assessment without a protest and hearing,
3    the penalty provided in this paragraph (2) shall be imposed
4    at the expiration of the period provided for the filing of
5    a protest.
6    (b-10) This subsection (b-10) is applicable to returns due
7on and after January 1, 2001 and on or before December 31,
82003. A penalty shall be imposed for failure to pay:
9        (1) the tax shown due on a return on or before the due
10    date prescribed for payment of that tax, an amount of
11    underpayment of estimated tax, or an amount that is
12    reported in an amended return other than an amended return
13    timely filed as required by subsection (b) of Section 506
14    of the Illinois Income Tax Act (penalty for late payment or
15    nonpayment of admitted liability). The amount of penalty
16    imposed under this subsection (b-10)(1) shall be 2% of any
17    amount that is paid no later than 30 days after the due
18    date, 5% of any amount that is paid later than 30 days
19    after the due date and not later than 90 days after the due
20    date, 10% of any amount that is paid later than 90 days
21    after the due date and not later than 180 days after the
22    due date, and 15% of any amount that is paid later than 180
23    days after the due date. If notice and demand is made for
24    the payment of any amount of tax due and if the amount due
25    is paid within 30 days after the date of the notice and
26    demand, then the penalty for late payment or nonpayment of

 

 

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1    admitted liability under this subsection (b-10)(1) on the
2    amount so paid shall not accrue for the period after the
3    date of the notice and demand.
4        (2) the full amount of any tax required to be shown due
5    on a return and that is not shown (penalty for late payment
6    or nonpayment of additional liability), within 30 days
7    after a notice of arithmetic error, notice and demand, or a
8    final assessment is issued by the Department. In the case
9    of a final assessment arising following a protest and
10    hearing, the 30-day period shall not begin until all
11    proceedings in court for review of the final assessment
12    have terminated or the period for obtaining a review has
13    expired without proceedings for a review having been
14    instituted. The amount of penalty imposed under this
15    subsection (b-10)(2) shall be 20% of any amount that is not
16    paid within the 30-day period. In the case of a notice of
17    tax liability that becomes a final assessment without a
18    protest and hearing, the penalty provided in this
19    subsection (b-10)(2) shall be imposed at the expiration of
20    the period provided for the filing of a protest.
21    (b-15) This subsection (b-15) is applicable to returns due
22on and after January 1, 2004 and on or before December 31,
232004. A penalty shall be imposed for failure to pay the tax
24shown due or required to be shown due on a return on or before
25the due date prescribed for payment of that tax, an amount of
26underpayment of estimated tax, or an amount that is reported in

 

 

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1an amended return other than an amended return timely filed as
2required by subsection (b) of Section 506 of the Illinois
3Income Tax Act (penalty for late payment or nonpayment of
4admitted liability). The amount of penalty imposed under this
5subsection (b-15)(1) shall be 2% of any amount that is paid no
6later than 30 days after the due date, 10% of any amount that
7is paid later than 30 days after the due date and not later
8than 90 days after the due date, 15% of any amount that is paid
9later than 90 days after the due date and not later than 180
10days after the due date, and 20% of any amount that is paid
11later than 180 days after the due date. If notice and demand is
12made for the payment of any amount of tax due and if the amount
13due is paid within 30 days after the date of this notice and
14demand, then the penalty for late payment or nonpayment of
15admitted liability under this subsection (b-15)(1) on the
16amount so paid shall not accrue for the period after the date
17of the notice and demand.
18    (b-20) This subsection (b-20) is applicable to returns due
19on and after January 1, 2005.
20        (1) A penalty shall be imposed for failure to pay,
21    prior to the due date for payment, any amount of tax the
22    payment of which is required to be made prior to the filing
23    of a return or without a return (penalty for late payment
24    or nonpayment of estimated or accelerated tax). The amount
25    of penalty imposed under this paragraph (1) shall be 2% of
26    any amount that is paid no later than 30 days after the due

 

 

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1    date and 10% of any amount that is paid later than 30 days
2    after the due date.
3        (2) A penalty shall be imposed for failure to pay the
4    tax shown due or required to be shown due on a return on or
5    before the due date prescribed for payment of that tax or
6    an amount that is reported in an amended return other than
7    an amended return timely filed as required by subsection
8    (b) of Section 506 of the Illinois Income Tax Act (penalty
9    for late payment or nonpayment of tax). The amount of
10    penalty imposed under this paragraph (2) shall be 2% of any
11    amount that is paid no later than 30 days after the due
12    date, 10% of any amount that is paid later than 30 days
13    after the due date and prior to the date the Department has
14    initiated an audit or investigation of the taxpayer, and
15    20% of any amount that is paid after the date the
16    Department has initiated an audit or investigation of the
17    taxpayer; provided that the penalty shall be reduced to 15%
18    if the entire amount due is paid not later than 30 days
19    after the Department has provided the taxpayer with an
20    amended return (following completion of an occupation,
21    use, or excise tax audit) or a form for waiver of
22    restrictions on assessment (following completion of an
23    income tax audit); provided further that the reduction to
24    15% shall be rescinded if the taxpayer makes any claim for
25    refund or credit of the tax, penalties, or interest
26    determined to be due upon audit, except in the case of a

 

 

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1    claim filed pursuant to subsection (b) of Section 506 of
2    the Illinois Income Tax Act or to claim a carryover of a
3    loss or credit, the availability of which was not
4    determined in the audit. For purposes of this paragraph
5    (2), any overpayment reported on an original return that
6    has been allowed as a refund or credit to the taxpayer
7    shall be deemed to have not been paid on or before the due
8    date for payment and any amount paid under protest pursuant
9    to the provisions of the State Officers and Employees Money
10    Disposition Act shall be deemed to have been paid after the
11    Department has initiated an audit and more than 30 days
12    after the Department has provided the taxpayer with an
13    amended return (following completion of an occupation,
14    use, or excise tax audit) or a form for waiver of
15    restrictions on assessment (following completion of an
16    income tax audit).
17        (3) The penalty imposed under this subsection (b-20)
18    shall be deemed assessed at the time the tax upon which the
19    penalty is computed is assessed, except that, if the
20    reduction of the penalty imposed under paragraph (2) of
21    this subsection (b-20) to 15% is rescinded because a claim
22    for refund or credit has been filed, the increase in
23    penalty shall be deemed assessed at the time the claim for
24    refund or credit is filed.
25    (c) For purposes of the late payment penalties, the basis
26of the penalty shall be the tax shown or required to be shown

 

 

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1on a return, whichever is applicable, reduced by any part of
2the tax which is paid on time and by any credit which was
3properly allowable on the date the return was required to be
4filed.
5    (d) A penalty shall be applied to the tax required to be
6shown even if that amount is less than the tax shown on the
7return.
8    (e) This subsection (e) is applicable to returns due before
9January 1, 2001. If both a subsection (b)(1) or (b-5)(1)
10penalty and a subsection (b)(2) or (b-5)(2) penalty are
11assessed against the same return, the subsection (b)(2) or
12(b-5)(2) penalty shall be assessed against only the additional
13tax found to be due.
14    (e-5) This subsection (e-5) is applicable to returns due on
15and after January 1, 2001. If both a subsection (b-10)(1)
16penalty and a subsection (b-10)(2) penalty are assessed against
17the same return, the subsection (b-10)(2) penalty shall be
18assessed against only the additional tax found to be due.
19    (f) If the taxpayer has failed to file the return, the
20Department shall determine the correct tax according to its
21best judgment and information, which amount shall be prima
22facie evidence of the correctness of the tax due.
23    (g) The time within which to file a return or pay an amount
24of tax due without imposition of a penalty does not extend the
25time within which to file a protest to a notice of tax
26liability or a notice of deficiency.

 

 

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1    (h) No return shall be determined to be unprocessable
2because of the omission of any information requested on the
3return pursuant to Section 2505-575 of the Department of
4Revenue Law (20 ILCS 2505/2505-575).
5    (i) If a taxpayer has a tax liability for the taxable
6period ending after June 30, 1983 and prior to July 1, 2002
7that is eligible for amnesty under the Tax Delinquency Amnesty
8Act and the taxpayer fails to satisfy the tax liability during
9the amnesty period provided for in that Act for that taxable
10period, then the penalty imposed by the Department under this
11Section shall be imposed in an amount that is 200% of the
12amount that would otherwise be imposed under this Section.
13    (j) If a taxpayer has a tax liability for the taxable
14period ending after June 30, 2002 and prior to July 1, 2009
15that is eligible for amnesty under the Tax Delinquency Amnesty
16Act, except for any tax liability reported pursuant to Section
17506(b) of the Illinois Income Tax Act (35 ILCS 5/506(b)) that
18is not final, and the taxpayer fails to satisfy the tax
19liability during the amnesty period provided for in that Act
20for that taxable period, then the penalty imposed by the
21Department under this Section shall be imposed in an amount
22that is 200% of the amount that would otherwise be imposed
23under this Section.
24(Source: P.A. 98-425, eff. 8-16-13.)
 
25    Section 99. Effective date. This Act takes effect upon
26becoming law.